M/S. Alchem International vs Commissioner Of Central Excise & S.T., ...

(Arising out of OIA-243-244/2009-AHD-III-KCG/CE/COMMR (A) dated 14.07.2009 Passed by Commissioner (Appeals) Central Excise & Customs, Ahmedabad)

M/s. Alchem International : Appellant (s) Shri Harshad Patel

VERSUS

Commissioner of Central Excise & S.T., Ahmedabad : Respondent (s)

Represented by :

For Appellant (s) : Shri Anand Nainawati, Advocate For Respondent (s) : Shri Alok Srivastava, Authorised Representative

For approval and signature :

Mr. P.K. Das, Honble Member (Judicial)

1 Whether Press Reporter may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?

No 2 Whether it should be released under Rule 27 of CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?

No 3 Whether their Lordships wish to see the fair copy of the Order?

Seen 4 Whether Order is to be circulated to the Departmental authorities?

Yes

CORAM :

Mr. P.K. Das, Honble Member (Judicial)

Date of Hearing / Decision : 08.01.2015

ORDER No. A/10032-10033/2015 Dated 08.01.2015

Per : Mr. P.K. Das;

These appeals are arising out of a common order and therefore, both are taken up together for disposal.

2. The appellants were engaged in the manufacture of Chloride and availing cenvat credit on inputs namely Copper Wire rod/ Cathode/ Ingots under Cenvat Credit Rules, 2004. DGCEI officers during investigation found that the appellant received copper wire rods and ingots from the registered dealer M/s. Pranav Metal Mart, Noida. It is found during the investigation that such copper rods, ingots were never reached the premises of the registered manufacturers located at Nadiad. So, the proceedings were initiated against the appellant and others on the basis that theyt availed cenvat credit on the basis of invoices issued by registered dealer M/s. Pranav Metal Mart, without receiving the goods. A show cause notice dated 29.11.2007 was issued to the appellants, proposing demand of duty alongwith interest and to impose penalties. The adjudicating authority confirmed demand of cenvat credit of Rs. 16,89,635/- alongwith interest and imposed penalty of equal amount on M/s. Alchem International (Appellant No.1) and also imposed penalty of Rs. 8,00,000/- on Shri Harshad Patel, Partner of M/s. Alchem International. By the impugned order, the Commissioner (Appeals) rejected the appeal filed by Appellant No.1, however, penalty on Shri Harshad Patel, Appellant No.2 was reduced to Rs. 3,00,000/-.

3. Learned Advocate on behalf of the appellants submits that they have received the goods from the registered dealer M/s. Pranav Metal Mart accompanied with the Central Excise invoices and availed cenvat credit which has utilised in the manufacture of final products, which were recorded in CENVAT Account. He submits that the appellant produced evidence of receipt of material, such as, transport documents, payment details etc., which were not disputed by the department. He fairly submits that the same registered dealer M/s. Pranav Metal Mart supplied goods to other manufacturers and the same proceedings were initiated against them. The Tribunal in the case of Monarch Metals Pvt. Limited vs. CCE, Ahmedabad  2010 (261) ELT 508 (Tri. Ahmd.) allowed the appeal on the identical issue. He further submits that the Honble Gujarat High Court in the case of Commissioner vs. Dhanlaxmi Tubes & Metal Industries  2014 (34) STR 155 (Guj.) dismissed the appeal filed by the Revenue against the order of the Tribunal. In the case of M/s. Dhanlaxmi Tubes & Metal Industries (supra) is connected both the cases, M/s. Monarch Metals Pvt. Limited (supra) and the assessees had also purchased ingots from the same registered dealer M/s. Pranav Metal Mart.

4. On the other hand, the learned Authorised Representative for the Revenue submits that the present case is distinguishable from the case law relied upon by the learned Advocate. He submits that in the present case, it is revealed from the adjudication order that the adjudicating authority had proceeded on the basis of transport documents of M/s. Pranav Metal Mart and the vehicles shown to have not been used for transportation of the goods.

5. After hearing both the sides and on perusal of the records, I find from the order of Commissioner (Appeals) that on the basis of DGCEI investigation several show cause notices were issued to various manufacturers on the similar ground that they have availed cenvat credit only on the basis of invoices issued by M/s. Pranav Metal Mart without receiving the goods. In this connection, Commissioner (Appeals) referred one of the stay order of this Tribunal in respect of other manufacturer. On perusal of the impugned order, I find that he cenvat credit was denied to the appellant on the basis of investigation against M/s. Pranav Metal Mart. Revenue has not raised any objection in respect of the evidences placed for receipt of the goods by the appellant in the nature of payment particulars, transportation of the goods from the dealers premises to the appellants factory etc. I find that, in the same situation, the Tribunal in the case of M/s. Monarch Metals Pvt. Limited set-aside the impugned order. The relevant portion of the said order is reproduced as under:-

8.?As is clear from the above that the appellate authority has not considered and appreciated various evidences on record which stand discussed in detail by the original adjudicating authority. He has allowed Revenues appeal on short ground which was the basis for the issuance of show cause notice that LR do not bear the check-post stamp and the statement of the transporter. The appellants have rightly contended that statement of the transporter being in the nature of co-accused, cannot be made the sole basis for holding against the appellant, unless corroborated with material particulars. I find that there is no such evidence on record. On the contrary, the assessee has produced ample evidence in the shape of documentary record to reflect upon the fact that they had actually received the inputs from the first dealer and had made payments to them through Demand Draft. In any case, the fact of non-stamping of LR is only in respect of the goods received by the registered dealer. As rightly observed by the original adjudicating authority, the same would not reflect upon the fact of non-receipt of the inputs by the appellant from the dealer inasmuch as the dealer might have supplied the inputs obtained by him from other source.

The Honble Gujarat High Court upheld the above order of the Tribunal in the case of M/s. Dhanlaxmi Tubes & Metal Industries (supra). The Honble High Court while dismissing the appeal filed by the Revenue observed as under:-

7.?As can be seen from the impugned order of the Tribunal, the Tribunal after appreciating the evidence on record has recorded that there is no evidence to reflect upon the fact that the inputs were not actually received by the assessee; there was no dispute that the LRs were issued by the transporter showing that the assessee is the consignee of the goods; the case of revenue was based on the goods registers maintained by the transporter which indicates the description of the goods as miscellaneous. According to the Tribunal, this fact, by itself, could not be held to be sufficient for arriving at the conclusion that the inputs were never transported to the assessees factory. The Tribunal found as a matter of fact that all documentary evidence on record supported the assessees case about the receipt of inputs, whereas there was no independent corroborative evidence produced on record by the revenue in support of its case.

8.?From the facts noted hereinabove, it is apparent that the Tribunal has appreciated the facts of the present case in proper perspective and upon appreciating the evidence on record, has as a matter of fact, recorded that except for the goods registers maintained by the transporter, there is no other evidence on record to indicate that the assessee has in fact not received the goods in question. In the circumstances, in the absence of any evidence to the contrary being pointed out on behalf of the revenue, the conclusion arrived at by the Tribunal being based upon findings of fact recorded by it upon proper appreciation of the evidence on record, cannot be said to be unreasonable or perverse.

6. I find that in the present case, there is no evidence that the appellant had not received the material from the registered dealer. The case laws relied upon by the appellant squarely cover the issue in the present case and in favour of the appellant.

7. In view of the above discussions, the impugned orders are set-aside. Both the appeals filed by the appellant are allowed with consequential relief.

(Dictated and pronounced in the Court)

(P.K. Das) Member (Judicial) ..KL

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